{"ok":true,"canonical_url":"https://dealroom.so/glossary/unsecured-debt","api_url":"https://dealroom.so/api/public/glossary/unsecured-debt","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"unsecured-debt","term":"Unsecured debt","group":"Reading the business","definition":"Debt not backed by specific collateral, like credit card debt or personal loans. For a buyer, this increases the business's or your personal liabilities without offering assets to cover it if things go wrong.","what_it_means":"Review the seller's balance sheet carefully for unsecured debt which adds to the company's liabilities. On a personal level, your own unsecured debt will impact your debt-to-income ratio and repayment capacity, which lenders scrutinize. Minimize it pre-closing if possible.","url":"https://dealroom.so/glossary/unsecured-debt","official_sources":[],"related":[{"slug":"liability","term":"Liability","url":"https://dealroom.so/glossary/liability"},{"slug":"debt-to-income-ratio","term":"Debt-to-Income Ratio","url":"https://dealroom.so/glossary/debt-to-income-ratio"},{"slug":"balance-sheet","term":"Balance Sheet","url":"https://dealroom.so/glossary/balance-sheet"},{"slug":"repayment-capacity","term":"Repayment capacity","url":"https://dealroom.so/glossary/repayment-capacity"}],"related_questions":[{"question":"Can I use an SBA 7(a) loan for debt consolidation of existing business debts?","url":"https://dealroom.so/sba-loans/basics/can-i-use-an-sba-7-a-loan-for-debt-consolidation-of-existing-business-debts"},{"question":"Can I use an unsecured personal loan from a bank to fund my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-an-unsecured-personal-loan-from-a-bank-to-fund-my-equity-injection"},{"question":"Can an unsecured personal loan from a friend be used as part of my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-an-unsecured-personal-loan-from-a-friend-be-used-as-part-of-my-equity-injection"},{"question":"Can funds from an unsecured personal line of credit be considered part of my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-funds-from-an-unsecured-personal-line-of-credit-be-considered-part-of-my-equity-inject"},{"question":"Can a buyer use an unsecured personal loan for their equity injection on an SBA 7(a) acquisition?","url":"https://dealroom.so/sba-7a/questions/can-a-buyer-use-an-unsecured-personal-loan-for-their-equity-injection-on-an-sba-7-a-acquis"},{"question":"How should a lender verify an equity injection sourced from an unsecured personal loan from an unrelated third party?","url":"https://dealroom.so/for-lenders/questions/how-should-a-lender-verify-an-equity-injection-sourced-from-an-unsecured-personal-loan-fro"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Unsecured debt","url":"https://dealroom.so/glossary/unsecured-debt","source_type":"DealRoom Data"}}